Page 39 - eBook Audit Of Financial Statement Components

Trade Receivables
The aging
Audit Assertion Audit Procedures listing should

Existence Obtain an aging listing of trade receivables balances, be checked on
test balances and aging by comparing amounts to
Occurrence the test basis
sales invoices and the debtors’ subsidiary ledgers.
with regards to

the accuracy in
Existence Select sample of trade receivables accounts for
confirmation and reconcile differences that arise. aging balances,
Valuation
even if it is
Valuation Review aging listing for recoverability of long
outstanding balances and check payment history of computer
Accuracy
trade debtors for the period under review.
generated. This

is important as
Valuation Consider write off of a bad and doubtful debts by
discussing with client on their recoverability. Note any inaccuracy

the cases on legal actions and the status on the legal would result in
actions.
a wrong

analysis of the
Existence Check subsequent payments by trade debtors after
year end. long

outstanding
Completeness Carry out a year end cut-off test to determine
whether sales and debtors’ balances are recorded balances and
Cut-off
correctly and accurately in the proper accounting the review for
period.
recoverability

would draw
Classification Ensure that trade receivables are properly disclosed
in the financial statements. incorrect
conclusions.
The aging

listing could
also provide

meaningful
information as
to the status of
credit control
in the company.

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